A carbon accounting system is needed to provide a consistent and transparent
approach to recording and reporting of changes in carbon stocks from applicable
activities for use in meeting commitments under Article 3 of the Kyoto Protocol.
This section presents a general accounting framework and describes some of the
generic issues that arise in bringing the LULUCF provisions of the Kyoto Protocol
into operation. Key considerations include how to identify stock changes resulting
from human-induced activities, the implications of different choices of system
boundaries and the timing of stock changes, and how to account for incomplete
data and uncertainty. Subsequent chapters in this Special Report present detailed
analyses of the implications of these issues for specific provisions of the
Protocol.

2.3.1. Objectives of an Accounting System

For the purposes of this Special Report, a carbon accounting system records,
summarizes, and reports the quantity of carbon emissions by sources and removals
by sinks through applicable LULUCF activities for a specific period of time.
Through the accounting system, Parties will quantitatively demonstrate the extent
to which LULUCF activities covered by the Kyoto Protocol affect their emission
reduction commitments. Building on the principles established in the UNFCCC
reporting guidelines for annual GHG inventories, an ideal accounting system
possesses the following core objectives: transparency, consistency, comparability,
completeness, and accuracy. Moreover, Article 3 of the Protocol requires that
carbon stock changes be verifiable. Moreover, practical constraints on implementation
indicate a need to consider the efficiency of an accounting system. These features
are discussed in turn below.

2.3.1.1. Transparency

According to the UNFCCC inventory reporting guidelines, transparency implies
that the assumptions and methods used are clearly explained so that users of
the information can replicate and assess the information. For an accounting
system, transparency means that reported information can be traced back to the
underlying data through a logical set of procedures that summarize the data.
For example, reported carbon fluxes may be estimated by a measurement method
that accounts for all relevant pools; in turn, the measurement method is applied
to data that represent carbon changes by pool.

2.3.1.2. Consistency

The ideal accounting system is consistent with the scientific principles of
carbon processes and the institutional context in which the system is applied.
Dimensions of scientific consistency include carbon coverage over space, pools,
and time. Those aspects are addressed in the full carbon accounting discussion
below. Institutional consistency refers to the system's correspondence to the
objectives driving the need for the system in the first place. For the purposes
of this Special Report, the institutional objective of the accounting system
is to demonstrate compliance with the Kyoto Protocol.

2.3.1.3. Comparability

An accounting system should produce information that is comparable across Parties
and over time. Because methods and data systems may differ across Parties and
time, strict comparability may be difficult to maintain. Nonetheless, differences
in methods and data should be made transparent so that the numbers are as consistent
and comparable as possible. Comparability may require some form of standardization.
Although such standards do not exist for a Protocol-specific accounting system,
the IPCC Guidelines (IPCC, 1997) may provide an initial framework.